The following data are for Arizona Retail Outlet Stores. The account balances (in thousands) are for 2017

Marketing and advertising costs..............................................$ 55,200

Merchandise inventory, January 1, 2017.....................................103,500

Shipping of merchandise to customers..........................................4,600

Depreciation on store fixtures....................................................9,660

Purchases........................................................................598,000

General and administrative costs..............................................73,600

Merchandise inventory, December 31, 2017...............................119,600

Merchandise freight-in..........................................................23,000

Purchase returns and allowances...............................................25,300

Purchase discounts...............................................................20,700

Revenues........................................................................736,000

Required

1. Compute (a) the cost of goods purchased and (b) the cost of goods sold.

2. Prepare the income statement for 2017.